Archive for the ‘Merkel’ Category

Obama cuts ‘Buy American’ plan after EU trade war threat

February 4, 2009

The European Union warned the US yesterday against plunging the world into depression by adopting a planned “Buy American” policy, intensifying fears of a trade war.

The EU threatened to retaliate if the US Congress went ahead with sweeping measures in its $800 billion (£554 billion) stimulus plan to restrict spending to American goods and services.

Gordon Brown was caught in the crossfire as John Bruton, the EU Ambassador to Washington, said that “history has shown us” where the closing of markets leads — a clear reference to the Depression of the 1930s, triggered by US protectionist laws.

From The Times (UK)

Read the rest:
http://www.timesonline.co.uk/tol/ne
ws/world/europe/article5655115.ece

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Economy Sparking Protectionism, Global Trade Disputes?

February 1, 2009

The world may be on the brink of a gentler kind of trade war.

By Anthony Faiola
The Washington Post

In 1930, Congress fired the first shot in a protectionist battle that prolonged and deepened the Great Depression. After passing a bill aimed at saving American jobs by effectively barring 20,000 imported goods, including French dresses and Argentine butter, other nations retaliated by raising their own barriers on U.S. products, effectively bringing global commerce to a halt.

In the aftermath, organizations like the World Trade Organization sought to ensure that never happened again. Nations agreed to put on economic straitjackets permitting them to raise tariffs within hard-fought limits. That is likely to help prevent a repeat of the devastating and overt trade wars seen during the Great Depression, since it is now far harder for nations to increase tariffs on a wide array of imports at once.
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But there remains a surprising amount of wiggle room in international trade and commerce treaties, and that, analysts say, is where the battle is now being fought as leaders worldwide face intense pressure at home to protect domestic jobs in the deepening financial crisis. They are engaging in a more subtle form of protectionism that often skirts those rules.

This weekend at the World Economic Forum in Davos, Switzerland, the annual event drawing the world’s leaders, luminaries of industry, commerce and philanthropy, a host of dignitaries raised a crescendo of alarm over growing economic nationalism. “We will resolutely fight protectionism,” Japanese Prime Minister Taro Aso told reporters there, giving voice to the general sentiment.

Yet even as leaders call for nations to do the right thing on the international stage, actually doing it at home is proving far tougher.

British Prime Minister Gordon Brown, for instance, delivered a particularly impassioned plea for nations to remain on the path of free trade yesterday. “This is not like the 1930s. The world can come together,” he said. However, back in Britain, the government is directing British banks with global operations now being rescued with taxpayers’ dollars to boost lending to British businesses and citizens first.

Read the rest:
http://www.washingtonpost.com/wp-dyn
/content/article/2009/01/31/AR20090
13101895.html?hpid=topnews

Related:
Obama Forced to Rethink “Buy American” in Stimulus After Hits from China, Germany, Others

Global Economy Sparks Protests; Governments Fear Greater “Social Unrest”

Obama Forced to Rethink “Buy American” in Stimulus After Hits from China, Germany, Others

January 31, 2009

President Barack Obama’s administration will examine a “buy American” requirement in economic stimulus legislation that has raised concern among U.S. trading partners, White House press secretary Robert Gibbs said.

The administration “will review that particular provision,” Gibbs said today at his regular briefing. The president’s advisers understand “all of the concerns that have been heard, not only in this room, but in newspapers produced both up north and down south.”

He refused to say whether the administration supported or opposed keeping that part of the legislation intact. Nor did he say what the president would do if the provision remains once the bill clears the House and the Senate.

The issue may cloud Obama’s trip to Canada on Feb. 19, his first journey outside U.S. borders as president. Officials in Canada, the top U.S. trade partner, are criticizing a part of legislation that passed the U.S. House of Representatives Jan. 28 that requires the use of U.S.-made iron and steel in infrastructure projects.

“U.S. protectionism is about to make Canada’s recession a lot worse,” Ralph Goodale, house leader for the opposition Liberal Party, said today in Parliament.

Read the rest:
http://www.bloomberg.com/apps/news?pid=2
0601087&sid=a37pHeTuz_HA&refer=worldwide

Global Economy Sparks Protests; Governments Fear Greater “Social Unrest”

January 31, 2009

Americans just started a new presidency but in China, Russia, France, Iceland and Britain, some leaders already fear that the worsening global economy will result in calls for new governments with new leaders and ideas.

Protesters in Rusia’s eastern most industrial hub and seaport, Vladivostok, called this week for new government leaders because of the economic down turn.

Opposition groups led by Communists protested the economic policies of the Russian government in the eastern city of Vladivostok on Saturday.
James Hill for The New York Times

The protest was peaceful; but more protests are planned.  And previous protests like this one in Russia ended in violence and the police making dozens of arrests. 

The crowd called for the replacement of Dmitri Medvedev and Vladimir Putin, Russia’s top leaders, for mismanaging the economy.

On Saturday protesters held demonstrations throughout Russia, offering largely subdued, but pointed criticism of the government’s economic policies as the country continues to sink deeper into an economic morass, the New York Times said.

In Britain, Prime Minister Gordon Brown is under fire.  He is currently taking heat for a jobs and rights protest that stems from his pledge that “British jobs need to be British.”
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Thousands of workers across Britain have walked off their jobs following protests over the use of foreigners at a Lincolnshire oil refinery.

On Saturday, the number of strikers multiplied, with hundreds of energy workers across the UK protesting — and with lines of police around them.

And millions of Chinese have gone home for the Spring Festival or New Year and told not to return to their jobs.  China is so worried about domestic unrest that it has started its largest anti-democracy crackdown ever: specifically targeting the media and Internet.

“People have this psychology of crisis,” said Victor Yuan, chairman of Beijing-based consultant Horizon Research Consultancy Group, which does polling for the private sector and the government.

Horizon’s latest survey showed consumer confidence at its lowest since the outbreak of severe acute respiratory syndrome, or SARS, in 2003.

“The real, real winter for the Chinese economy hasn’t come yet,” said Chen Jian, chairman of Hangzhou Hengwei Investment Co., which has business in restaurants, real estate and trading.

In France, President Sarkozy can’t get away from the jeers and shouts of protestors when he makes public appearances.  He has taken to firing public officials that  don’t keep protesters far away from the President’s ears.

A crowd of 300,000 protested in Paris this week in the largest protest in 10 years, some said.

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Paris this week

Countries such as France and Greece have been hit by riots and strikes as militant unions demand protectionist measures to keep out foreign rivals.

And both Germany and China expressed fears of American protectionism this week.  Angela Merkel of German told audiences at the economic conference in Davos that the U.S. auto bailout hurts the global economy and spells a new era of protectionism from the U.S.  China’s Hu Juntao told President Barack Obama that the “buy American” provision in the stimulus was rank protectionism and needed to be scuttled.

The economy has made the entire world more tense.

The French Finance Minister Christine Lagarde said, “We’re facing two major risks: one is social unrest and the second is protectionism.”

“We need to restore confidence in the systems and confidence at large,” she added.

Christine Lagarde
Lagarde

Former U.N. Secretary-General Kofi Annan says the world body needs to be reorganized in view of the economic crisis.

“The current architecture of managing global affairs is broken and needs to be fixed,” Annan said.

The worldwide economic recession has exposed a “crisis of global governance” that can only be addressed by the radical reform of the United Nations, said Mr. Annan.

And Britain’s Prime Minister Gordon Brown has called on world leaders to set about reforming international financial institutions to prevent a repeat of the circumstances that led to the current financial crisis.

“We’ve got to be far bolder and far more imaginative,” Brown said. “We want to create a global society. But we need to have global institutions that work and the problem is the institutions we built 60 years ago are out of date.”

By John E. Carey
Wakefield Chapel, Virginia

The BBC on Russian Protests:
http://news.bbc.co.uk/2/hi/europe/7862370.stm

Related:
Britain:
 Oil refinery strikes: Protests over foreign workers

France’s Sarkozy Getting Testy Amid Public Disapporval, Fires Public Servants

China, Germany Both Pressure Obama on Protectionism

Kofi Annan: Global Economy Tells Us, New forms of government needed

From CNN:
http://www.cnn.com/2009/BUSINESS/0
1/31/davos.wef.brown/index.html

http://www.cnn.com/2009/BUSINESS/0
1/30/britain.refinery.strikes/index.html

Paris:
http://www.belfasttelegraph.co.uk/news/
world-news/300000-protest-in-paris-14
162666.html?r=RSS

China, Germany Both Pressure Obama on Protectionism

January 31, 2009

China’s president urged better ties with the United States in his first phone conversation with President Barack Obama, and called for both sides to resist trade protectionism, Beijing said Saturday.

Friday’s conversation, 11 days into Obama’s presidency, followed sharp exchanges between the two sides over China’s currency policy, amid criticisms that China manipulates its yuan to boost its exports overseas.

AFP

An account of the conversation issued by the Chinese foreign ministry quoted President Hu Jintao telling Obama that China would work toward a “more constructive China-US relationship.”

Hu told Obama China welcomed US efforts to shore up the American economy, but warned against moves toward protectionism, the statement said.

“We hope to strengthen communication and coordination on macroeconomic policy and firmly resist trade protectionism,” Hu was quoted saying.

Read the rest:
http://news.yahoo.com/s/afp/20090131/w
l_asia_afp/uschinadiplomacyobamahu_200
90131055621

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Germany’s Merkel Working With China To Stop Protectionism

Reuters

 German Chancellor Angela Merkel said on Thursday her country and China would avoid protectionism and maintain last year’s trade volumes in 2009.

“Despite the economic situation we have undertaken with China to at least maintain our trade volume if not increase it,” Merkel said at a joint news conference with Chinese Premier Wen Jiabao.

Wen was in Berlin as part of a European tour to discuss cooperation in solving the international financial crisis.

China, the world’s third-largest economy, has slowed much more sharply than expected due to the financial crisis, as wilting U.S. and European demand have hurt its export sector.

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“Don’t let’s lose sight of what creates wealth. It is open markets, it is capitalism,” News Corp CE Rupert Murdoch said yesterday.

Business Day
http://www.businessday.co.za/articles/frontpage.aspx?ID=BD4A927967

Merkel and Brown Challenge Obama, Call for Global Economy Rules

January 31, 2009

German Chancellor Angela Merkel and British Prime Minister Gordon Brown argued for tougher control of the international economy, opening up a potential split with the United States on ending the financial crisis.

AFP

Merkel said a UN economic council based on the UN Security Council may have to be created to police the global economy, while Brown said his “shared revolution” would strengthen current international institutions.

Both proposals went counter to US ideas rejecting any global enforcer. At a Group of 20 summit in November, Washington fought for national regulators to take precedence.

Brown and Merkel set out the case for greater international control at the World Economic Forum in Davos, both looking forward to a new G20 summit on the crisis to be held in London in April.

The British prime minister, his concentration broken by his own mobile phone ringing during a press conference, called for “a shared revolution in common action to deal with real problems.”

Read the rest:
http://news.yahoo.com/s/afp/20090131/
ts_afp/davoseconomypolitics_20090131
074426

Related:
Germany Calls U.S. Auto Bailout “Protectionism”
http://edition.cnn.com/2009/BUSINESS/01/
30/davos.wef.friday.wrap/index.html

Most World Leaders Encouraged By Obama Time; Putin Ready for Disappointment

January 21, 2009

Asked about the prospects of the world with a President of the United States Barack Obama, Russin Preident Vladimir Putin said, “I am deeply convinced that the biggest disappointments are born out of big expectations.”

Other world leaders were more upbeat…

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AFP

Obama-fever swept the globe Tuesday (20 Jan) carrying widespread public hopes that the incoming US president would lead the world into a new crisis-free era.

In the hours before Barack Obama took the oath of office in Washington, foreign governments and new polls all showed huge support for the Democratic president even though many analysts have warned that expectations for his rule are unrealistic.

Pictures of Obama dominated front pages and television news programmes around the world. Spain’s El Pais newspaper published a photo of Obama and his wife Michelle above the headline: “The American Dream Comes to Power”

Spanish Prime Minister Jose Luis Zapatero said an “Obama effect” could shorten the global recession.

“In my opinion, the economic crisis could be shorter than expected if the new administration of Barack Obama generates confidence,” said Zapatero.

“We could see a rebound faster than expected, it is a question of confidence because the fundamentals of the global economy are good enough,” added the socialist premier.

German Chancellor Angela Merkel was looking forward to working closely with Obama, a spokesman for the German leader said.

Obama will make two visits to Europe in April for an international summit on the economic crisis and a NATO alliance meeting.

“In general, we are looking forward to co-operating with the new US president and are expecting to tackle the many questions which concern us both,” spokesman Ulrich Wilhelm told a news conference.

Britain’s Prime Minister Gordon Brown has already said the Middle East should be Obama’s top foreign priority and other leaders have also pressed the case for issues ranging from climate change to helping the world’s poor.

Hopes that Obama can improve US ties with the rest of the world have grown in the run-up to his inauguration, according to a poll of people in 17 countries for the BBC World Service radio.

An average of 67% of people believe Obama will strengthen America’s relations abroad, with more than 50% thinking so in all but two — Japan and Russia — of the countries polled.

The global financial crisis should be Obama’s top priority, followed by pulling US troops out of Iraq, tackling climate change, and brokering peace in the Middle East, the survey said.

Ghanaians are most positive, on 87%, followed by Italy (79%), Germany and Spain (78% each), and France (76%), followed by Mexico and Nigeria (74% each).

Polls in Canada suggest more than 80% of people there approve of the new US president. Obama could visit Canada in Feb and its Prime Minister Stephen Harper described the trip as “a wonderful gesture and a great sign of re-establishing the strong Canadian-American relations.”

But Harper was also among leaders to douse hopes that Obama could fix all problems ranging from wars in the Middle East and Afghanistan to the economic crisis and global warming.

“None of us are under any illusions about the great challenges that face President Obama,” commented Harper, who said Obama should concentrate on the economy.

Other warnings have already come from Germany where Merkel said last week that there would be “very serious discussions” if the United States gave what Europe considers unfair help to its ailing auto industry.

Russia has expressed hope that Obama will make concessions on US plans to build a missile shield in central Europe and on NATO membership for Georgia and Ukraine, which Russia considers its sphere of influence.

But Russia’s Prime Minister Vladimir Putin expressed scepticism while on a trip to Berlin on Saturday (17 Jan). “I am deeply convinced that the biggest disappointments are born out of big expectations,” he said of Obama’s inauguration.

“Familiarity with Obama seems to be breeding hope,” said Steven Kull of the University of Maryland in the United States, which compiled the BBC survey with polling firm GlobeScan.

Read the rest:
http://www.mysinchew.com/node/20349?tid=14

Europeans Deplore Huge Debts, Spending to Solve Current Economic Crisis

January 8, 2009

The head of Europe‘s biggest economy said Thursday that world leaders should be looking at the massive U.S. deficit and other economic imbalances, not just problems caused by financial markets, as they debate a new global order.

Speaking at a conference in Paris on the future of capitalism, German Chancellor Angela Merkel singled out the American budget deficit and China‘s current account surplus — the difference between exports and imports — as problems upsetting the global economy.

“We would be making an error if we were content to look solely at financial markets,” she said.

She deplored huge debts that governments are accumulating to spend their way out of the present crisis. But she said she recognized, for the moment, that “there is no other possibility.”

By EMMA VANDORE and GREG KELLER, AP Business Writers

French President Nicolas Sarkozy delivers a speech at the symposium ... 
French President Nicolas Sarkozy delivers a speech at the symposium ‘New World, New Capitalism’ in Paris Thursday Jan. 8, 2009. Sarkozy and former British prime minister Tony Blair host a conference on the financial crisis focusing on values and development. Sarkozy has hit out at financial speculators for having ‘perverted’ capitalism, which he said Thursday should be overhauled with a new role for governments and moral values.(AP Photo/Philippe Wojazer/Pool)

A Congressional Budget Office report estimates that the U.S. federal budget deficit will hit an unparalleled $1.2 trillion for the 2009 budget year — and that is before President-elect Barack Obama’s sweeping stimulus package is calculated. European governments have agreed to be flexible about budget rules that limit deficits to 3 percent of gross domestic product as recession bites.

Merkel said the International Monetary Fund has not managed to regulate global capitalism, and she called for the creation of an economy body at the United Nations, similar to the Security Council, to judge government policy.

French President Nicolas Sarkozy, leading the two-day conference with former British Prime Minister Tony Blair, blamed financial speculators for encouraging a system fueled on debt. He called financial capitalism based on speculation “an immoral system” that has “perverted the logic of capitalism.”

“It’s a system where wealth goes to the wealthy, where work is devalued, where production is devalued, where entrepreneurial spirit is devalued,” he said.

 

Read the rest:
http://news.yahoo.com/s/ap/20090108/
ap_on_bi_ge/eu_france_new_capitalism

Global Economic Bailout: Germany Attacks Britain’s Plan

December 11, 2008

Gordon Brown’s multibillion pound economic rescue plan has been dismissed as ineffective and expensive by Germany’s finance minister.

By James Kirkup
The Telegraph (UK)

Peer Steinbrück launched an outspoken attack on Mr Brown’s fiscal stimulus package, saying a cut in VAT would have little impact and predicting that the huge debts the Treasury is taking on will be a burden on the UK economy for a generation.

Brown's economic rescue plan ineffective says German minister Peer Steinbruck

Mr Steinbrück said the VAT cut would make little difference to consumer spending Photo: AP

The remarks are an embarrassment for the Prime Minister, who has repeatedly claimed his plans have set the template that other countries are following.

They came the same day Mr Brown was ridiculed in the Commons for declaring that his policies had “saved the world.”

Mr Steinbrück’s remarks, in an interview with Newsweek magazine, surfaced on the eve of a European Union summit where Germany is set to reject Mr Brown’s appeals for others to follow his lead.

Germany’s chancellor, Angela Merkel, is a Conservative, but she leads a coalition government and Mr Steinbrück is from the Social Democrats, a centre-left party with links to Labour.

Read the rest:
http://www.telegraph.co.uk/finance/3704461/
Browns-economic-rescue-plan-inefective-says
-German-minister.html